At Almost ?5,000 Crore, RBI Spends Highest Amount On Banknote Printing Since Demonetisation

In the financial year 2021-22, the RBI spent ?4,984.8 crores on security printing of banknotes purchased from printing presses. At ?4,012.1 crores, the spending was about 25% lower in previous period.

It is noteworthy that the total supply of banknotes by printing presses BRBNMPL and SPMCIL was marginally lower (2,23,301 lakh pieces in FY21 and 2,22,505 lakh pieces in FY22) this time vs previous financial year.

And this nearly ?5,000 crores overall cost of printing currency in FY22 was the second-highest by RBI, after an all-time high of nearly ?8,000 crores during the year of demonetisation (2016-17), as per an HBL report.

The selling price of banknotes in the denomination of ?20, ?50, ?100 and ?200 have gone up in FY22 vs the previous financial year. However, for notes in the denomination of ?500, the prices have remained unchanged for that period.

For the uninitiated, selling price refers to the price at which printing presses supply paper currency to their sole buyer, i.e, the RBI.

The information is as per a report in HBL, which included the data about the selling price for different banknotes in the past few years, according to details reportedly sourced through RTI from the RBI-owned subsidiary BRBNMPL (Bharatiya Reserve Bank Note Mudran Ltd), which plays a crucial role in designing, printing and supply of banknotes.

The selling price for 1,000 pieces of ?50 banknotes recorded a maximum increase of around 23% in FY22 v/s FY21. These notes occupied 6.7% of the total circulation of banknotes in FY22. The selling price of ?20 bank note reportedly registered the lowest increase of a little over 1% over the same period ()

The selling price of ?200 notes rose up to reach ?2,370 in FY22, vs ?2,220 per 1000 notes in FY21, whereas for ?100 notes, it was ?1,770 in FY22, vs ?1,640 per 1000 notes in FY21.

As per the annual RBI report, in FY2022, the highest denomination notes of ?2,000 occupied just 1.6% of circulation, down from 2% in FY21 and 2.4% of FY20. The data regarding their selling price was not mentioned in the HBL report.

shutterstock

Also Read: Fake Currency Notes Of Rs 500 & 2,000 Surge 101% & 54% In FY22, Says RBI Annual Report

Moreover, in FY22, despite notes of ?500 denomination having the highest volume (34.9% of all denomination) among all the paper notes in circulation (total 13,05,326 lakh pieces of all banknotes), and also in terms of value (73.3% of the value of all denomination), their selling price has not seen any change in FY22 v/s FY21, the Hindu Business Line report stated. In the previous FY21, the total circulation of banknotes was 12,43,671 lakh pieces, as per RBI annual report.

There are four printing presses, of which two are owned by the RBI through its wholly-owned subsidiary, BRBNML, while the remaining two come under the ownership of the Central government, operated through its wholly-owned company, Security Printing & Minting Corporation of India Limited (SPMCIL).

Although BRBNML reportedly did not give any reason for the change in selling prices, it is believed that the prices of most of the denominations went up on account of higher input costs, especially for paper. For ?500 denomination notes, the no change in prices could be due to economy of scale as 57 per cent of the total indent was for this denomination, the report stated.

shutterstock

Reducing Import Dependency On Banknote Production

According to RBI¡¯s annual report, Colour Shift Intaglio Ink (CSII), a security feature used in the Indian banknotes that were imported earlier, is now being indigenously manufactured at Varnika, the Ink Manufacturing Unit at BRBNMPL, Mysuru, meeting the entire requirement of both BRBNMPL and SPMCIL. This has resulted in a significant reduction in import dependency for banknote production as also saving of foreign exchange.

Also Read: Did You Know India Used To Have Rs 10,000 Rupee Note? Here's What It Looked Like

For the latest and interesting financial news, keep reading Indiatimes Worth. Click here.